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Effects to be determined

Impact of sequester
on U.S. wastewater treatment plants still being assessed.

Sequester? What
sequester? That’s what at least some U.S. municipal wastewater utilities may be
wondering 3 months after across-the-board automatic spending cuts took effect
in federal agencies on March 1.

At that time, a
flurry of news reports announced a sampling of sequestration’s likely impacts.
Illegal aliens would be released, underutilized airport control towers would be
closed — even the annual White House Easter egg roll was at risk, the reports
predicted, as federal agencies scrambled to absorb $85 billion in mandatory
cuts in their fiscal year 2013 budgets. And that is just the beginning. Unless
the U.S. Congress enacts legislation to replace it, the sequester will remain
in effect for the next 10 years, mandating federal spending cuts of $1.2
trillion.

According to
preliminary reports from the U.S. Environmental Protection Agency (EPA), the
impact of these cuts on U.S. water resource recovery facilities likely will
range from fewer inspections for Clean Water Act compliance to fewer grants and
low-cost loans for projects aimed at cleaning up polluted water supplies.

Few of these actions
have yet been felt at the local level, said a handful of municipal wastewater
officials who agreed to speak with WE&T on the subject. Many more
declined, noting that, at this point, they had nothing to add to the
conversation.

The
impact on EPA

It is clear that
EPA’s budget for fiscal year 2013, which will end Sept. 30, was cut by $472
million, or about 5%, according to the White House Office of Management and
Budget’s sequester order.

Nearly three-fourths
of these cuts come from EPA’s two largest accounts. The agency’s state and
tribal assistance grant budget was cut by $210 million, which will have an
impact on states that depend on EPA funding to implement environmental
programs. EPA’s environmental and program management budget, which funds many
of the agency’s regulatory programs, faces cuts of $135 million.

At press time, Alisha
Johnson, a press secretary for EPA said that precisely where and how these cuts
would be manifested still was being assessed at agency headquarters. The agency
has been gathering information from its regional offices that will guide its
decision-making.

“[The regional
offices are] the ones that will see most of the day-to-day impact,” Johnson
said. “As we compile this information, we’ll be making final determinations on
how to proceed.”

Staff furloughs are
part of the mix, as EPA sent notices in March to 17,000 employees alerting them
of the possibility of up to 13 days of unpaid leave each before the end of the
fiscal year. Since federal employees are
entitled to receive a month’s notice before being furloughed, the first wave of
furloughs began to take effect April 21.

As for other impacts,
in late April, EPA was referring reporters to a communication sent in early
February from then-EPA Administrator Lisa Jackson to the U.S. Senate. Jackson’s
report provided a preliminary assessment of the sequester’s impact on EPA
programs, people, and services and included some clues to what lies ahead. It cited
several potential impacts:

Weaker enforcement of environmental laws—with fewer staff available to monitor compliance, EPA could cancel
as many as 1000 inspections for Clean Water Act and Clean Air Act compliance in
fiscal year 2013.

Cancellation
of clean water projects — as many as 100 projects aimed at cleaning water
supplies or protecting water sources could be shelved. EPA also could find that
it lacks the resources to develop the permits needed to bring new facilities
into operation.

Less
money for state revolving funds — cuts to the agency’s Clean Water and Drinking
Water State Revolving funds could hurt smaller communities and others seeking
access to low-interest funding to build or repair their infrastructures.

Less
green infrastructure research—research into best management
practices for green infrastructure, as well as a host of other research
programs, could slow, to the detriment of municipalities facing stormwater
enforcement actions.

Trickle-down
may take time

How these impacts and
others will play out on the local level will become clearer in the weeks and
months ahead as EPA begins to implement its cuts. But Allen Mounts may have
begun to see hints of what is to come already. Mounts is director of utilities
for the Evansville (Ind.) Water and Sewer Authority, which is putting the
finishing touches on the long-range control plan it is required to implement as
part of the consent decree agreement it signed with EPA Region 5 in January
2011.

“We’ve been in
discussions with EPA on the deliverables under our consent decree for many
months,” Mounts said. “But we’ve recently noticed a change in how we
communicate, with telephone conference calls now often taking the place of
in-person meetings.”

EPA hasn’t officially
used the “S” word in its communications with Evansville. “Their comment has
been that they don’t have the funds to travel,” said Mounts. “We’re assuming
it’s related to sequestration.”

“It’s been relatively
minor,” Mounts added, “and to the extent that it is minor, you can manage to
it.”

Ted Henifin, general
manager of Hampton Roads Sanitation District in Virginia Beach, Va., said his
utility had not seen any changes in its interactions with EPA as a result of
sequestration — and he wasn’t expecting much moving forward.

Henifin also
questions the impact that further cuts in federal funding might have on Hampton
Roads and other utilities.

“There had been
little to no federal grant money available before sequestration,” Henifin said.
“The only significant federal grant dollars in recent years were associated
with stimulus funding that also dried up prior to sequestration.”

The State Revolving
Fund (SRF) loan program, he said, could be another story. “There is a potential
for less funding to the SRF, which could impact the low-interest loans
available through that program,” he said. “If SRF funding is reduced, smaller
utilities may feel it most, as will [utilities] with credit challenges that
make it difficult to access capital from other sources.”

Other
impacts still to come?

Might water resource
recovery facilities find their production slowed due to government cutbacks
elsewhere, such as the military? Henifin doesn’t believe so — at least for now
— despite the strong U.S. Navy presence in his region.

“Unless the federal
government actually cuts personnel and they move out of our service area, we
will see their flow whether [they are] at work or at home,” he explained. “In
fact, [a] reduction in ship deployments may actually result in increased
revenues, as the personnel will be using water within our service area as
opposed to being at sea.”

While
today’s impacts may be negligible, Michael Sweeney, deputy executive
director of the Toho Water Authority (Kissimmee, Fla.), is concerned that the
sequester could have unintended consequences should it continue beyond the
current fiscal year.

“The CBO
[Congressional Budget Office] projects sequestration may reduce growth by 0.75
to 1.5 percentage points,” Sweeney said. “That could mean a slowdown in new
home starts, tourism, [and other activities] that are important to our area.
The sequestration doesn’t translate well to fueling immediate job growth.”

But such impacts can
be difficult to tie to any one program. And people must begin to feel them
directly before they capture much attention.Or, as Sweeney puts
it, “Implementing the Affordable Medical Care Act seems to predominate the
conversation more than sequestration.” He can only hope it stays that way.

At issue were two
letters sent by EPA in June and September 2011 to U.S. Sen. Charles Grassley
(R–Iowa). The relevant portions of the letters provided thatbacteria
mixing zones in waters designated for primary contact recreation carry
potential health risks and should not be permitted by state agencies authorized
to implement and enforce Clean Water Act regulations; and use
of a secondary treatment alternative (ACTIFLO®) fails to “provide
treatment necessary to meet the minimum requirements provided in the secondary
treatment regulations at 40 CFR 133.” (ACTIFLO is a patented,
proprietary physical/chemical process of Veolia Water Solutions &
Technologies [Paris] that uses ballasted flocculation in which chemicals are
used to aggregate solids and sands, causing them to settle faster. EPA views
this process as an impermissible diversion or bypass from traditional biological
secondary treatment that would only be allowed upon a showing of no feasible
alternatives.)

The
court determined that these two letters were thinly disguised regulations.
Based on the fact that EPA failed to promulgate these regulations using the
proper procedures — formal rulemaking with notice and comment — the court
vacated both the mixing zone rule and the blending rule and remanded the case
to EPA for further consideration. In addition, the court ruled that EPA’s
conclusion that blending (in this case, use of ACTIFLO) had to be
justified with a “no feasible alternatives” analysis exceeded EPA’s statutory
authority to the extent that it would impose the effluent limitations of the
secondary treatment regulations internally, rather than at the point of
discharge into navigable waters.

Mixing
zones

In its 1994 Water
Quality Handbook, EPA defines a mixing zone as “a limited area or volume of
water where initial dilution of a discharge takes place and where numeric water
quality criteria can be exceeded.” EPA regulations give states the discretion
to develop mixing zone policies in their water quality standards, subject to
EPA review.

Blending

Blending is a process
of diverting flow around biological secondary treatment units during wet
weather events when a treatment facility has reached or is near capacity to
avoid overwhelming the biological system. Flow receives primary treatment and
disinfection, is diverted and then blended with fully treated effluent before
discharge into the receiving waterbody. The goal is a blended wastewater stream
that meets secondary treatment standards and all relevant water standards.

In 2005, EPA
proclaimed that diverting peak wet weather flow now shall be considered a
bypass and allowed only when there is a demonstration that no feasible
alternatives are available. EPA never officially adopted this policy, and as
late as June 2010, the agency continued to solicit public input through notices
in the Federal Register. This unofficial policy contradicts EPA’s
secondary treatment rule, which applies effluent limitations at the point of
discharge into navigable waters unless impractical to do so; the rule also
precludes the imposition of any particular technology to achieve effluent
limitations. Thus, the secondary treatment rule allows blending if effluent
limitations are met at end-of-pipe.

Background

After years of
conflicting messages from EPA on the permissibility of mixing zones and
blending, the Iowa League of Cities (Des Moines), which represents more than
870 cities, asked Grassley to seek clarification from EPA. After receiving
EPA’s two letters in response to Grassley’s inquiry, the league sought
appellate review in the 8th Circuit, arguing that the letters set forth
regulatory requirements and that EPA had violated the Administrative Procedures
Act (APA) by attempting to implement them without following the notice and
comment procedures for agency rulemaking. Even if EPA had followed proper
procedure, the league argued, it lacked the statutory authority to impose the
regulations.

Court’s
analysis and decision

After determining
that it had jurisdiction to review the case, that the matter was ripe for
review, and that the league had standing to bring suit, the court turned to the
merits of the case.

For the procedural
challenge, the court said that three factors should be examined to determine if
an agency action constitutes a regulation: the agency’s own characterization of
the action, whether the action was published in the Federal Register,
and whether the action has binding effects on private parties or on the agency.
Focusing on the third factor, the 8th Circuit cited the District of Columbia
Circuit Court of Appeals in Appalachian Power Co. v. EPA:

If an agency acts as
if a document issued at headquarters is controlling in the field, if it treats
the document in the same manner as it treats a legislative rule, if it bases
enforcement actions on the policies or interpretations formulated in the
document, if it leads private parties or State permitting authorities to
believe that it will declare permits invalid unless they comply with the terms
of the document, then the agency’s document is for all practical purposes
‘binding.’

The court held that
both the mixing zone rule in the June 2011 letter and the blending rule in the
September 2011 letter had binding effect on regulated entities and were,
therefore, regulations requiring APA notice and comment. Having bypassed this
process, the court said, the rules were procedurally invalid: “As agencies
expand on the often broad language of their enabling statutes by issuing layer
upon layer of guidance documents and interpretative memoranda, formerly
flexible strata can ossify into rule-like rigidity. In such circumstances,
notice and comment procedures are required in order to ‘secure the values of
government transparency and public participation.’”

The court went on to
vacate the blending rule on substantive grounds “as in excess of statutory
authority insofar as it would impose the effluent limitations of the secondary
treatment regulations internally, rather than at the point of discharge into
navigable waters.”

Turning to the
substantive challenge to the mixing zone rule, the court found that the Clean
Water Act obviously does not preclude EPA’s mixing zone rule. Thus, that rule
survived a substantive challenge but may be challenged again after EPA cures
the procedural defects (i.e., promulgates the rule in accordance with
APA procedures for notice and comment).

Impact

According to EPA
estimates, compliance with the blending rule alone would cost local governments
$150 billion in new equipment and wastewater storage systems. In Iowa, the
estimated cost of compliance for Des Moines (population: 206,599) is between
$80 million and $200 million; for Davenport (population: 100,802),
approximately $250 million; and for Ottumwa (population: 24,881), approximately
$60 million. Thus, it is no surprise that the regulated community is declaring
this a major victory. According to Nathan Gardner–Andrews, general counsel for
the National Association of Clean Water Agencies (Washington, D.C.), the ruling
“provides utilities with important flexibility going forward in selecting peak
flow management options that play an integral role in helping utilities provide
maximum treatment to wet weather flows and protect water quality.”

Nancy Wheatley, vice
president of CDM Smith (Cambridge, Mass.) and a member of the Water Environment
Federation (Alexandria, Va.) Government Affairs Committee, said, “Ironically,
by taking a hard line on blending during wet weather events, when treatment
processes are strained, those in EPA who have advocated that position have not
only denied POTWs a real opportunity to manage wet weather flows efficiently
and effectively, they inadvertently may have damaged EPA’s ability to enforce
the technology requirement. The technology requirement is intended to provide
minimum treatment for all discharges. If EPA can only evaluate compliance with
secondary [treatment regulations] at the end of the pipe, that may open up
opportunities to provide less treatment during dry weather conditions by
diverting around secondary processes.”

At press time, EPA
had not announced whether it will appeal the decision.

— Amanda Waters, WE&T

Testing what’s possible

U.S. Department of Energy funds two major university projects that highlight the value of algae and wastewater as a biofuel source

Wastewater can serve as a source of
renewable energy by supplying nutrients that can be used in fertilizers, biogas
that can be generated in anaerobic digesters, and thermal heat that can be used
to supply an alternative energy source for buildings. For years, wastewater
also has served as good feedstock for algae, a biofuel that can be grown quickly
and abundantly in the right environment.

“The wastewater
[treatment] industry is [the] inspiration of the biofuel industry,” said Tryg
J. Lundquist,associate professor of civil and environmental engineering
at California Polytechnic State University (San Luis Obispo). He said the
wastewater treatment industryovercame climatic limitations to grow
microorganisms, and it always has embraced progressive research and
development.

“Algae biofuels even
grew out of the wastewater treatment industry,” Lundquist said.“Bill
Oswald of [the University of California–Berkeley] came up with the concept back
in the 1950s of raceway ponds. His original purpose was to accelerate
wastewater treatment in ponds, and he stumbled upon the algae growth and the
accompanying biomass. He would feed the algae to animals and use it in
anaerobic digesters for biogas production. The [U.S. Department of Energy
(DOE)] later approached researchers to produce biofuel rather than just
biogas.”

The federal
government saw the big opportunity in algae biofuel because it can be used by
the military and commercial airlines as fuel.

“Over the past 8
years, there has been a lot of funding for algae biofuel and algae production
projects,” Lundquist said. Two of these projects
are being conducted by California Polytechnic State University and Arizona
State University (ASU; Phoenix) at the City of San Luis Obispo (Calif.) Water
Reclamation Facility.Lundquist said the
university has been doing pilot work at this water resource recovery facility
(WRRF) since 2007. It started with small tank ponds, and then, with funding
from the California Energy Commission fund, it was able to expand to nine 30-m2
raceway-style ponds.

The first project, to
which DOE supplied $1.4 million, uses one of the facility’s nine ponds. It also
involves installing additional tank ponds.The project will show
how much researchers can recycle water and nutrients within an algae production
facility, Lundquist said. “So far, there haven’t been any big pilot projects on
how often you can recycle water without inhibitors impeding algae growth,” he
explained.

The other question
that the project hopes to address is how efficiently researchers can recycle
those nutrients to grow another crop of algae.

“Wastewater provides
[a] source of water and nutrients for algae production, but the amount of fuel
we need is enormous,” Lundquist said. “There aren’t enough [WRRFs] to provide
enough biofuel that we need.” So, the best way to do so is to only use the
additional wastewater to make up for evaporation and nutrient losses of
recycled water, he said.

But projects like
these face limitations, such as, “We need sites that are sunny, warm, and
flat,” Lundquist said. “Reasonable-price land also must be available,” he
added. “There are a lot of people in northern states and in Canada that may be
interested in similar projects, but they lack the all-year-round warm
temperatures. It could be a challenge.”

Lundquist said the
ideal climates are “where they’re doing three crops of alfalfa a year, as
opposed to one crop a year. States like California, Arizona, and Texas are [a]
more ideal commercial situation [for algae growth].”

The second project is
being conducted by ASU and funded by a $14 million to $15 million DOE grant.
ASU will work with partners in Hawaii, California, Arizona, Ohio, and possibly Georgia,
Lundquist said. All of the sites will have identical tank ponds. ASU will
produce a specific algal strain that will have biofuel use and will test how
the strain performs and survives at each site, he said.

The algae in this
experiment face many obstacles, Lundquist said. They include encountering an
invasive strain of algae that could take over the pond, and microorganisms,
such as rotifers, and diseases that can attack the algae. Also, this algae
strain may not perform well in some weather conditions.

Lundquist said both
research teams are hoping to learn a lot from their experiments, and the WRRF
also is anticipating the results.

“[Algae] is a crop
that has a quick turnaround and can therefore accelerate research,” Lundquist
said. “Hopefully, both fields can benefit from this collaboration.”